Asia Markets recap: Stocks on the rise at week’s end

February 20, 2014, 6:42 PM ET

Reuters

Welcome to the Asia Markets live blog, a running account of what the region’s stock markets are doing, along with other news. Today, stocks end the week on a mostly high note, helped by a positive lead from Wall Street.

We’re rolling higher on the Sydney bourse today, with the S&P/ASX 200 trading up 0.6% in the first hour.

Some of the most heavily weighted blue chips are serving as the foundation for the price build-up, with ANZ up 0.8%, and BHP Billiton higher by 1.4%, though NAB is 1.8% underwater, as the market looks past its rising profit and shrinking bad-loan portfolio, concentrating instead on rising expenses. (Read details on NAB earnings here.)

The roller-coaster ride of a week for Japanese stocks may also end up being a winner for the market. The Nikkei Average was up by 2.1% roughly 45 minutes into the session, putting it in line for a more than 3% advance since last Friday. Read more.

Stocks rallied 3.1% early this week, with the move spurred by the Bank of Japan’s extension of lending facilities to banks to foster growth. After pocketing a portion of those gains for two days afterward, it appears investors are back in the buying mode.

Perhaps they found some encouragement from minutes from the Bank of Japan’s most recent meeting, released Friday. Many board members said they agreed it was important to communicate their aim in continuing their monetary stimulus efforts “as long as it is necessary” for reaching and maintaining a 2% inflation target.

Latest statistics showed the network provider’s 3G customers grew by 7.4% to about 206 million by the end of January, a net increase of more than 14 million. In December, China Mobile added 10 million new 3G susbcribers.

Shares of China Mobile rallied 1.5% in Hong Kong. In fact, investors showed great interest in all three mainland Chinese mobile carriers, as stocks of both China Telecom and China Unicom also saw a pop up of more than 1.4% each.

Meanwhile, one of Asia’s largest insurers — AIA Group — reported a 6.5% drop in profit for 2013, but its value of new business climbed 25% to $1.49 billion, helping lift its Hong Kong-traded stocks up by 0.3%. Read more on early Chinese stock trade here.

Crédit Agricole economist Dariusz Kowalczyk has looked into his China crystal ball, and what he saw were bears.

While some in the China-watcher community were unperturbed at yesterday’s unexpectedly weak manufacturing data (see the story here), Kowalczyk is ringing bells of warning.

In a note out today entitled “Hopes reined in,” he paints a picture of a sharply slowing China, citing weak corporate earnings and a deceleration of production and electrical consumption, both leading indicators for Chinese industry.

At the same time, he sees Beijing as lowering its own economic expectations, in line with the cooling of China’s previously red-hot growth.

“In 2014, stimulus will not be necessary due to momentum from 2013 if the government cuts the 2014 [gross domestic product] target to 7.0% (our call),” he writes.

But it gets worse: “In 2015, the momentum will ebb away and another stimulus will be needed even if the target is lowered to 6.5% (our call),” Kowalczyk says.

The Crédit Agricole forecast puts actual GDP growth just ahead of those targets, slowing to 7.2% this year, 6.8% next year, and “about 6.5%” in 2016. And even with these relatively bearish projections, Kowalczyk adds that the “risks to our forecast are skewed to the downside.”

Now while 6.5% would overheat a developed economy like that of the U.S. or U.K., some other economists have labeled it as the upper limit of a “hard landing” for China, given its needs to sustain employment and further develop the nation.

Hong Kong-based fashion retailer Esprit Holdings /quotes/zigman/38257/realtimeHK:330 advanced 0.7%, as the company said it had returned to profit in the six months ended December after cutting costs, earning HK$95 million ($12.26 million).

Investors also seemed to be bullish about the upcoming earnings of global banking giant HSBC Holdings/quotes/zigman/13834/realtimeHK:5, which was scheduled to report results next week. Its shares popped up by 1.1%.

But AIA Group /quotes/zigman/613725/realtimeHK:1299, one of the world’s largest insurers, closed 0.1% lower, after climbing as high as 1.4% during the session. Its net profit dropped 6.5%, although the value of its new business surged 25% to $1.5 billion in the year to November.

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